Key Takeaways
- Account transcript codes are 3-digit numbers used by the IRS to indicate certain actions taken on a taxpayer’s account
- These codes can be used by lenders to better understand a borrower’s financial history
- TOD simplifies these transcript codes by organizing their key insights into automated reports
- View our Transcript Codes Cheat Sheet for information on the most common codes, what they mean, and how lenders can use them to draw insights on borrowers
Every loan decision is only as strong as the data behind it. Account transcript codes aren’t just bureaucratic shorthand— for lenders, they’re the difference between approving a creditworthy borrower and inheriting someone else’s risk.
Understanding what these codes actually mean and how to use them to draw strategic insights can protect your portfolio and sharpen every underwriting decision you make.
Understanding what these codes actually mean and how to use them to draw strategic insights can protect your portfolio and sharpen every underwriting decision you make.
What Are Account Transcript Codes?
IRS account transcript codes or “transaction codes” (TC) are 3-digit numbers used by the IRS on tax transcripts that indicate certain tax-related activities.
In order to view actions taken on an IRS tax account, you must access the Account Transcript. This is the transcript that displays these action codes.
All tax transactions have corresponding codes, although not all actions taken by the IRS are visible to taxpayers.
Keep reading to find our Account Transcript Codes Cheat Sheet.
In order to view actions taken on an IRS tax account, you must access the Account Transcript. This is the transcript that displays these action codes.
All tax transactions have corresponding codes, although not all actions taken by the IRS are visible to taxpayers.
Keep reading to find our Account Transcript Codes Cheat Sheet.
How Can Lenders Draw Insights From These Codes?
Map cash flows: Use TC 846/840/841/898/826 and dates to see whether expected refunds became cash, were delayed, or were seized/redirected.
Assess compliance behavior: Look for patterns—on‑time filings (TC 150, TC 460), timely payments (TC 610/670), recurring penalties/interest (TC 240/340), and frequent amended returns (TC 977).
Gauge current risk: Open audits (TC 420), refund holds (TC 570 without a 571/572), liens (TC 582), bankruptcy/litigation (TC 520), and recent assessments (TC 290/300) can all signal near‑term liquidity or contingent liability risk.
Assess compliance behavior: Look for patterns—on‑time filings (TC 150, TC 460), timely payments (TC 610/670), recurring penalties/interest (TC 240/340), and frequent amended returns (TC 977).
Gauge current risk: Open audits (TC 420), refund holds (TC 570 without a 571/572), liens (TC 582), bankruptcy/litigation (TC 520), and recent assessments (TC 290/300) can all signal near‑term liquidity or contingent liability risk.
How TOD Simplifies IRS Transcript Codes
TOD’s filing summary function takes the data from borrower transcripts and organizes it into a cohesive, easily digestible report for lenders.
This report includes a simplified overview of the last several years of the business’s tax history, indicating years the business did or did not file with the IRS, any amended returns, and notices issued on the account.
This report includes a simplified overview of the last several years of the business’s tax history, indicating years the business did or did not file with the IRS, any amended returns, and notices issued on the account.
IRS Account Transcript Code Cheat Sheet
Here are some of the most common transcript codes and their meanings:
Tax Return Posted and Baseline Tax
150 — Original return processed and tax assessed
What it means: The IRS has posted the return for that year and established the baseline tax liability.
Why it matters: Confirms the borrower filed their taxes. Use it as the starting point for balance due/refund and to align with the borrower’s filed return.
What it means: The IRS has posted the return for that year and established the baseline tax liability.
Why it matters: Confirms the borrower filed their taxes. Use it as the starting point for balance due/refund and to align with the borrower’s filed return.
Withholdings, Credits, and Credit Transfers
806/807— Withholding credits (W‑2/1099)
What it means: IRS has applied wage/1099 withholding against the tax.
Why it matters: Reduces the tax balance due. Large withholdings with no subsequent refund may indicate prior offsets or balances.
766/767 — Miscellaneous credits (e.g., refundable credits, prior adjustments)
What it means: Credits applied to the account (child credits, earned income tax credit for taxpayers with low-to-moderate income, or other systemic credits).
Why it matters: Reduces balance due or funds a refund. If later reversed, cash flow can tighten.
836 — Credit elected to next year’s estimated tax
What it means: A refund was applied forward instead of paid out.
Why it matters: Expected cash inflow didn’t materialize; signals proactive tax planning but reduces current‑year liquidity.
826 — Refund/credit offset to another tax period or module
What it means: The IRS applied available credit/refund to other tax debts.
Why it matters: Indicates outstanding IRS obligations. Reduces borrower liquidity and flags a broader compliance risk.
What it means: IRS has applied wage/1099 withholding against the tax.
Why it matters: Reduces the tax balance due. Large withholdings with no subsequent refund may indicate prior offsets or balances.
766/767 — Miscellaneous credits (e.g., refundable credits, prior adjustments)
What it means: Credits applied to the account (child credits, earned income tax credit for taxpayers with low-to-moderate income, or other systemic credits).
Why it matters: Reduces balance due or funds a refund. If later reversed, cash flow can tighten.
836 — Credit elected to next year’s estimated tax
What it means: A refund was applied forward instead of paid out.
Why it matters: Expected cash inflow didn’t materialize; signals proactive tax planning but reduces current‑year liquidity.
826 — Refund/credit offset to another tax period or module
What it means: The IRS applied available credit/refund to other tax debts.
Why it matters: Indicates outstanding IRS obligations. Reduces borrower liquidity and flags a broader compliance risk.
Payments and Refunds
610 — Payment with return
What it means: Payment submitted at filing.
Why it matters: Evidence of ability/willingness to pay at filing time.
670 — Subsequent payment (e.g., estimated or after filing)
What it means: Additional payment posted after the return.
Why it matters: Shows ongoing compliance or catch‑up activity; look for a pattern of timely payments.
846 — Refund issued
What it means: Refund has been released (direct deposit or check).
Why it matters: Actual cash inflow to the borrower on that date.
840 — Manual refund issued
What it means: Refund paid by manual action (outside normal cycles).
Why it matters: Often after a delay or correction; still a cash inflow but may reflect prior issues.
841 — Refund reversed/canceled
What it means: Previously issued refund was pulled back.
Why it matters: Expected cash didn’t materialize; may point to pending review or new liability.
898 — Treasury Offset Program (TOP) offset
What it means: Refund seized to pay federal or state debts (e.g., student loans, child support).
Why it matters: Signals other delinquent obligations and reduces available cash.
What it means: Payment submitted at filing.
Why it matters: Evidence of ability/willingness to pay at filing time.
670 — Subsequent payment (e.g., estimated or after filing)
What it means: Additional payment posted after the return.
Why it matters: Shows ongoing compliance or catch‑up activity; look for a pattern of timely payments.
846 — Refund issued
What it means: Refund has been released (direct deposit or check).
Why it matters: Actual cash inflow to the borrower on that date.
840 — Manual refund issued
What it means: Refund paid by manual action (outside normal cycles).
Why it matters: Often after a delay or correction; still a cash inflow but may reflect prior issues.
841 — Refund reversed/canceled
What it means: Previously issued refund was pulled back.
Why it matters: Expected cash didn’t materialize; may point to pending review or new liability.
898 — Treasury Offset Program (TOP) offset
What it means: Refund seized to pay federal or state debts (e.g., student loans, child support).
Why it matters: Signals other delinquent obligations and reduces available cash.
Holds and Processing Delays
570 — Additional account action pending; refund freeze
What it means: The IRS has placed a hold (identity verification, manual review, potential math error, etc.).
Why it matters: Refunds won’t pay out until resolved; short‑term liquidity risk. Watch for resolution codes.
571/572 — Hold/restriction released
What it means: The prior TC 570 hold is cleared.
Why it matters: Indicates the account is moving again; refunds/adjustments can process.
What it means: The IRS has placed a hold (identity verification, manual review, potential math error, etc.).
Why it matters: Refunds won’t pay out until resolved; short‑term liquidity risk. Watch for resolution codes.
571/572 — Hold/restriction released
What it means: The prior TC 570 hold is cleared.
Why it matters: Indicates the account is moving again; refunds/adjustments can process.
Adjustments, Penalties, and Interest
290/291 — Additional tax assessed / Decrease to tax (non‑exam)
What it means: Changes not from an audit (math error correction, amended return, IRS adjustment).
Why it matters: Can create or reduce balances due. Recent TC 290s may imply near‑term payment requirements.
300/301 — Additional tax assessed / Decrease to tax from examination (audit)
What it means: Audit‑driven change to liability.
Why it matters: Elevated compliance risk and potential new payment obligations; verify if a payment plan exists.
240/241 — Penalty assessed / Penalty abated
What it means: The IRS assessed or removed a penalty (specific type identified by a Penalty Reference Number).
Why it matters: Penalties increase cost of noncompliance; repeated penalties suggest chronic filing/payment issues.
340/341 — Interest assessed / Interest abated
What it means: Accrual or reduction of statutory interest on unpaid tax.
Why it matters: Ongoing interest signals sustained balances and rising total obligations.
What it means: Changes not from an audit (math error correction, amended return, IRS adjustment).
Why it matters: Can create or reduce balances due. Recent TC 290s may imply near‑term payment requirements.
300/301 — Additional tax assessed / Decrease to tax from examination (audit)
What it means: Audit‑driven change to liability.
Why it matters: Elevated compliance risk and potential new payment obligations; verify if a payment plan exists.
240/241 — Penalty assessed / Penalty abated
What it means: The IRS assessed or removed a penalty (specific type identified by a Penalty Reference Number).
Why it matters: Penalties increase cost of noncompliance; repeated penalties suggest chronic filing/payment issues.
340/341 — Interest assessed / Interest abated
What it means: Accrual or reduction of statutory interest on unpaid tax.
Why it matters: Ongoing interest signals sustained balances and rising total obligations.
Exams, Extensions, and Amended Returns
424 — Examination request established (return selected for review)
What it means: Return pulled for possible audit; may precede TC 420.
Why it matters: Potential for future adjustments; refunds may be delayed.
420 — Examination (audit) opened
What it means: Audit controls established for that year.
Why it matters: Heightened risk of additional tax due and refund holds. Monitor for closure (TC 421) and results (TC 300/301).
421 — Examination closed
What it means: Audit finished and controls released.
Why it matters: Reduces uncertainty; check for resulting assessments or abatements.
460 — Filing extension approved
What it means: Taxpayer filed Form 4868/7004; more time to file the return.
Why it matters: Not a negative by itself, but it can delay refund timing and verification of income until the return posts. Even though the time to file is extended, any expected payments are still due by the initial tax filing date.
976/977 — Duplicate/original return posted after initial / Amended return posted
What it means: IRS received a second or amended filing.
Why it matters: Expect subsequent adjustments (TC 290/291) and possible timing gaps in reported income or liabilities.
What it means: Return pulled for possible audit; may precede TC 420.
Why it matters: Potential for future adjustments; refunds may be delayed.
420 — Examination (audit) opened
What it means: Audit controls established for that year.
Why it matters: Heightened risk of additional tax due and refund holds. Monitor for closure (TC 421) and results (TC 300/301).
421 — Examination closed
What it means: Audit finished and controls released.
Why it matters: Reduces uncertainty; check for resulting assessments or abatements.
460 — Filing extension approved
What it means: Taxpayer filed Form 4868/7004; more time to file the return.
Why it matters: Not a negative by itself, but it can delay refund timing and verification of income until the return posts. Even though the time to file is extended, any expected payments are still due by the initial tax filing date.
976/977 — Duplicate/original return posted after initial / Amended return posted
What it means: IRS received a second or amended filing.
Why it matters: Expect subsequent adjustments (TC 290/291) and possible timing gaps in reported income or liabilities.
Collections, Legal Status, and Liens
520 — Litigation/bankruptcy or similar action; collection suspended
What it means: The account is in a protected status (e.g., bankruptcy), pausing normal collection.
Why it matters: Major risk flag. May restrict IRS collection now but indicates financial distress and future obligations.
582/583 — Notice of Federal Tax Lien filed / Lien released
What it means: NFTL recorded or later released.
Why it matters: Directly impacts credit and collateral considerations; evidence of unresolved (or resolved) tax delinquency.
What it means: The account is in a protected status (e.g., bankruptcy), pausing normal collection.
Why it matters: Major risk flag. May restrict IRS collection now but indicates financial distress and future obligations.
582/583 — Notice of Federal Tax Lien filed / Lien released
What it means: NFTL recorded or later released.
Why it matters: Directly impacts credit and collateral considerations; evidence of unresolved (or resolved) tax delinquency.
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